401k Lawsuit Denied by Federal Judge

8 Tips for Financial Success

As a financial advisor I thought I would share with you my personal favorite 8 tips I believe all individuals, couples or families should be practicing.


  1. There are no get rich quick schemes. Embrace this mindset. Once you realize the path to prosperity is through a slow methodical plan of attack the better off you will be.
  2. Build your emergency fund. You should be thinking along these lines: If a storm damaged your roof, could you comfortably replace it? If your car suddenly dies, could you comfortably replace it?
  3. Be aware of your costs and expenses. Many of us turn on automatic payments and deductions and may not take the time to reconcile our monthly expenses. It is a smart exercise to look through and review bank and credit card statements, reviewing receipts, and turning off services you are not using.
  4. Start investing today. The path to retirement begins the moment you start saving for retirement. Remember tip 1: there is no get rich quick scheme. Don’t wait to start planning ahead, the earlier you start the better off you will be.
  5. Walk away from that purchase. Take 24 hours from that impulse big expenditure. If you still need it or want it 24 hours later, it will most likely still be there. Do you want money or things?
  6. Protect your loved ones. If something were to happen where you, or your spouse, lost your ability to earn an income you will want disability and/or life insurance to protect against this loss.
  7. Basic estate planning. At the very least, you should have a legally binding Will in place to determine where and how assets will be distributed. Do not leave this task up to the government to decide.
  8. Set goals! Setting goals is important for a few reasons. Setting and meeting goals grants us a feeling of achievement, of a job well done. Setting goals also allows us to hold ourselves or our professionals we hire to a high standard. If your goals are unattainable your financial professional can set you straight. If you are investing for yourself and never making your goals it may be time to seek help.

If you would like to learn more about my thoughts related to personal finance and how easy building blocks can begin a lifetime of wealth please email me at [email protected] or find me on Facebook at Paul Hundley, Lighthouse Capital. You can read more of my blogs at the Lighthouse Capital Blog.

Make it a healthy, happy and profitable day!

Paul Hundley

Many Fidelity 401k Plans may be in Violation of New DOL Fiduciary Rule

According to a report, Fidelity, the largest 401k provider in the country, will now act as a plan level investment fiduciary to certain 401k plans. However, many advisors feel as though Fidelity has an inherent conflict of interest in acting in this capacity which may expose plan sponsors to a violation of the new DOL Fiduciary rule. The new DOL regulation aims to reduce/eliminate conflicts of interest in providing investment advice to retirement investors.

Here is where the potential problem lies. Fidelity offers an “open architecture” 401k platform, which allows Fidelity funds and non-Fidelity funds to be utilized as plan investments. With Fidelity offering hundreds of their own proprietary mutual fund products, logic suggests it will be difficult for Fidelity to be unbiased when determining whether a Fidelity or non-Fidelity fund is in the plan’s best interest. Many advisors think this is a poor business practice for Fidelity to roll out, as it may confuse plan sponsors into thinking that they are exposed to less risk than they are, and potentially result in Fidelity not serving their clients best interest. At the very least, Fidelity may have just created an appearance of a conflict of interest, which could be problematic.

The fiduciary investment advice which Fidelity will provide will only occur at a “point in time” (at plan set-up) and they will NOT be providing on-going monitoring of plan investments, which will be a duty left to plan sponsors.

401k Lawsuit Denied by Federal Judge

Summary: Last Thursday, a federal district court judge in Minnesota dismissed a class-action lawsuit brought forth by participants in the Wells Fargo 401k plan. The suit alleged that Wells Fargo breached their fiduciary duty by including their own Wells Fargo target date funds in the plan. Central to the plaintiff’s argument was that Fidelity and Vanguard offered lower cost and better performing funds in comparison to the Wells Fargo funds. However, the court disagreed with the plaintiffs assertion that the mere existence of less expensive and better performing funds, without showing a flawed decision making process, was grounds for a 401k fiduciary breach lawsuit. In the 10 page decision issued by the court, Judge Doty stated, “[plaintiff] pleads no facts suggesting that the choice of affiliated funds was the result of flawed decision-making.” This decision is subject to appeal and could possibly be overturned by the United States Court of Appeals for the 8th Circuit.

Our take: Plan Sponsor’s may insulate themselves from 401k lawsuits by having a sound decision-making process for determining what funds should be included in their 401k. Having an independent investment adviser quarterback this process can be an inexpensive way to provide this value. Learn how we can help manage your 401k by contacting us at [email protected].